Oil Industry Headlines: Week of November 30
Recent surges in international crude oil prices have caused unique problems in China, where the government imposes controls on fuel pricing. Chinese oil refiners, who buy crude on the open market, recently scaled back operations to almost nothing in order to avoid selling refined products at heavily discounted, state-set rates. The resulting national shortage in fuel supplies prompted Chinese officials to order its two largest oil companies, Sinopec and PetroChina, to restore operations to full capacity. Although the government has already raised state-set prices almost 10%, the oil companies are still experiencing huge operating losses. This week, China announced that it will “give subsidies to oil refiners to help offset the gap between high international crude oil prices and controlled domestic fuel prices . . . The companies will receive rebates and will be exempt from paying oil import duties,” reported the Associated Press. Nigerian Energy Minister H. Odein Ajumogobia said Thursday that approximately 900,000 barrels of crude output per day have been halted to due unrest in the Niger Delta and oilfield closures, reported Bloomberg. Just this week, gunmen attacked a boat operated by Exxon Mobil, killing one person and seriously injuring another. In another incident, “Troops patrolling the militant-infested waterways of Nigeria’s oil producing region torched two barges Friday after the boats were found transporting stolen petroleum products . . . The two boats were discovered carrying stolen loads of a petroleum-industry byproduct, and troops set the water craft ablaze to destroy them,” reported BusinessWeek. “Analysts say some 10 percent of Nigeria’s 2.5 million barrel production capacity is lost to theft, which is a major source of funds for criminals and militants in the area. As reported last week, a major pipeline explosion in Clearbrook, Minnesota killed two workers and halted the transport of over one million barrels of crude oil per day. This week, officials at Enbridge, the pipeline’s operator, said that Line 3 has now been fully restored. Line 3 transports roughly 450,000 barrels per day. So far no word has emerged when Line 4, which transports approximately 700,000 barrels per day, will be operational.Published Thursday, December 6th, 2007 at 12:03 pm and filed under Industry News.